Event analysis: LlamaLoan's market monetary policy rolled back to Semilog policy and raised the highest interest rate to 70% background The LlamaLoan market has recently been affected by market downturns, with the previously adopted 'Secondary Monetary Policy' resulting in excessively low interest rates under Maximum Utilization. Due to the low loan interest rates, borrowers lack sufficient motivation to repay their loans, and depositors are unable to withdraw their supplied crvUSD, leading to a liquidity crisis in the market. The affected markets include: •wETH-long •wstETH-long •wBTC-long •tBTC-long •wETH-long2 problem analysis The secondary monetary policy of LlamaLoan market is linked to the crvUSD coinage market interest rate, which directly affects the borrowing interest rate of LlamaLoan market by the fluctuation of crvUSD market interest rate. Due to the recent significant decrease in interest rates in the crvUSD coin market (from 12.5% to below 5%), the maximum borrowing rate in the LlamaLoan market is only 3x crvUSD Mint Market Rate, which is insufficient to incentivize borrowers to repay their debts. This creates a vicious cycle: 1. If the borrower fails to repay the loan, the market utilization rate will increase, and depositors will be unable to withdraw funds. 2. Depositors are unable to withdraw funds, and the overall market is in a state of frozen funds. Proposal Content To address this issue, the proposal suggests: 1. Rolling back monetary policy - returning from secondary monetary policy to the original Semilog monetary policy, allowing the market to return to a more stable and predictable interest rate pattern. 2. Increase maximum interest rate - Raise the maximum borrowing rate in the market to 70% to ensure that borrowers have sufficient motivation to repay loans when market utilization is high, allowing the market to resume normal operations. influence Reasons for supporting this proposal Borrowers will be incentivized to repay the loan as the implementation of the proposal will result in higher borrowing costs under the new interest rate model. Depositors can withdraw crvUSD, and as borrowers repay their debts, market liquidity will be restored. The market will adjust interest rates based on supply and demand dynamics, and will no longer be affected by fluctuations in the crvUSD coinage market. Reasons for opposing the proposal Market interest rates will no longer be directly linked to the crvUSD Mint Market, which may affect the strategies of certain market participants. Borrowers will immediately face interest rate adjustments, which may bring short-term financial pressure. Voting Status The proposal has been submitted to Curve DAO for voting, with voting number 955. summary The core objective of this proposal is to repair the liquidity dilemma in the LlamaLoan market caused by the need for monetary policy, by rolling back to Semilog monetary policy and raising the highest interest rate to 70% to encourage borrowers to repay loans, thereby restoring normal market operations. If the proposal is passed, the borrowing rate of LlamaLoan market will no longer rely on crvUSD Mint Market, but will be adjusted according to Semilog monetary policy to better meet market demand.